KOLKATA: India’s telecom regulator has sought views on the timing, pricing and quantum of spectrum to be sold in the next round of auctions, which could see 5G airwaves promising blistering download speeds making a debut. The financially stressed industry though is in no mood to pitch for bandwidth before 2019.

In its consultation paper issued Monday, the Telecom Regulatory Authority of India (Trai) also sought carriers' views on spectrum caps and rollout obligations for 5G spectrum besides the pricing of 4G airwaves in the coveted 700 MHz band that went unsold in the last auction.

The sector regulator also sought industry's views on the valuation methodology of spectrum in the 3300-3400 MHz and 3400-3600 MHz bands – used for 5G services. And on whether such valuation can be derived from other airwave bands “using a technical efficiency factor”.

“The government is planning to auction the right to use of spectrum in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-3400 MHz and 3400-3600 MHz bands in the next auction to be held in 2017,” Trai said in the consultation paper.

Trai also took a pot shot at the telecom department (DoT), saying it had sought had sought some additional information on some of the issues from its Wireless Planning & Coordination (WPC) wing.

“However, despite reminders, WPC has not provided the information sought till date. However, to avoid delay, this Consultation Paper has been finalised based on information available with the Authority,” Trai said.

The spectrum sale could put on the table 60% of unsold airwaves from the last October auctions and some 275 units of new spectrum in bands identified for 5G services.

In the paper, Trai sought to know when to hold the next sale, noting the spectrum acquired in the October 2016 auction was yet to be deployed fully. Moreover, the telecom Industry was currently consolidating with some telcos in the process of exiting.

“Due to hyper competition, concerns have been expressed about the financial health of the sector, its revenue growth and the capability of the companies to meet their contractual commitments etc,” Trai said.

It added that the telecom department (DoT) has indicated that about Rs 3.08 lakh crore is due over the next 11 years on account of deferred payment plans opted by telcos for the purchase of spectrum in the recent auctions. Further, telecom industry also owes about Rs 4.60 lakh crore to various financial institutions and banks.

The telecom industry is also averse to any sale of airwaves – 4G or 5G - before 2019, said Rajan Mathews, Director General of the Cellular Operators Association of India (COAI), which represents big phone companies such as Bharti Airtel, Vodafone India, Idea Cellular and Reliance Jio Infocomm amongst others.

“The regulatory & technical standards for 5G are globally still in the process of deliberations and consultations. Thus, 2019 might be a more appropriate time to auction 5G spectrum by when a suitable ecosystem – including apps and services - is likely to develop and also better use cases and applications around 5G technology,” he said.

Mathews added that auctions per se should be pushed back ideally to early 2019, once the ongoing sector consolidation draws to a close.

“Since the industry is undergoing an acute financial crisis, which has triggered M&As, the next auction should ideally happen only by early-2019 once all sector consolidation has been announced and locked down,” said COAI’s Mathews.

Phone companies also want the regulator to cut the starting price of premium 4G spectrum in 700 MHz band, which found no takers in the last spectrum sale. Telcos had found the last auction base price of Rs 11,485 crore for a unit of 700 MHz spectrum --- or Rs 57,425 crore for a 5-MHz pan-India block -- too stiff and refused to bid for such airwaves.

“Trai needs to immediately revisit the reserve price of 700 MHz band and price it much lower as per the prevailing market ecosystem,” said COAI’s Mathews.

Mahesh Uppal, director at Com First (India), a consultancy dealing in telecom regulatory affairs, said “the starting price of 700 MHz band should ideally be lowered to a tenth of the base price pegged in the October 2016 sale”.

Trai has also invited telcos’ views on whether the market-discovered price of various bands auctioned in the October 2016 spectrum sale can be benchmarked as the starting price of airwaves proposed to be auctioned in the next sale.

It has set September 25 and October 3 as deadlines for stakeholders' comments and counter-comments respectively. It will then hold open house discussions before makings its recommendations to the telecom department.

In the last spectrum sale, the government had put Rs 5.66 lakh-crore of airwaves to auction. Response to that auction, which raked in a modest Rs 65,789 crore, was muted due to high bandwidth costs, especially those of 700 MHz airwaves.

DoT, however, had told the finance ministry that it does not expect telcos to bid for airwaves this year and had asked it to lower its revenue expectations from the sector by 37% to about Rs 29,500 crore for this financial year.